Question

In: Accounting

1. A corporation has 71,376 shares of $24 par stock outstanding that has a current market...

1. A corporation has 71,376 shares of $24 par stock outstanding that has a current market value of $312 per share. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately

a.$17,844

b.$288

c.$78

d.$6

2. On January 1 of the current year, the Barton Corporation issued 9% bonds with a face value of $98,000. The bonds are sold for $95,060. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is

a.$2,940

b.$735

c.$9,408

d.$8,820

3. A company with working capital of $840,000 and a current ratio of 4 pays a $135,000 short-term liability. The amount of working capital immediately after payment is

a.$840,000

b.$705,000

c.$135,000

d.$975,000

4. A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 4% stock dividend on a date when the market price was $12 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

a.$19,200

b.$32,000

c.$12,800

d.$48,800

5. The balance sheets at the end of each of the first two years of operations indicate the following:

Kellman Company
	Year 2	Year 1
Total current assets	$627,334	$563,517
Total investments	61,933	43,071
Total property, plant, and equipment	946,792	708,418
Total current liabilities	113,967	87,707
Total long-term liabilities	287,103	225,002
Preferred 9% stock, $100 par	82,116	82,116
Common stock, $10 par	571,867	571,867
Paid-in capital in excess of par-common stock	60,515	60,515
Retained earnings	520,491	287,799

Using the balance sheets for Kellman Company, if net income is $119,551 and interest expense is $31,114 for Year 2, and the market price of common shares is $34, what is the price-earnings ratio on common stock for Year 2 (rounded to two decimal places)?

a.1.96

b.10.69

c.10.21

d.17.35

Expert Solution

The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet.

ekkarill92 answered 1 day ago

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